HOW WE'LL KEEP PAYING for the flood crisis
informed
How we’ll keep paying for the flood crisis The economic impact from the Brisbane flood will be felt for months, if not years, with job losses, increased insurance premiums and rising prices on the horizon. Margaret de Silva reports
call... 3899 7333 www. 06
.co
25 january 2011
Ipswich corridor, while tourism is expected to suffer after terrifying flood images were beamed across the world. These industries were already struggling – farmers experienced years of drought, tourism struggled during the global financial crisis and manufacturing suffered from the high Australian dollar. The impact on mining towns and agricultural areas such as the Lockyer Valley will be felt in Brisbane, with local engineering and construction firms unable to complete scheduled work and the price of fruit and veggies to rise. The Food and Grocery Council of Australia warns crop damage has limited the supply of berries, watermelon and pineapples, while AUSVEG says flooding has caused the price of sweet potato, ginger and pumpkin to double since November, with additional hikes likely for tomatoes, capsicum and zucchini. Geoff Trotter from fuel monitoring group Fueltrac says ethanol blended petrol will all but disappear from most Brisbane servos, as ethanol crops were wiped out. BP says ethanol blends will be replaced with unleaded for up to five months and Trotter says many fuel stations will only have pricier premium unleaded as an alternative. It could take decades for Moreton Bay to fully recover. Australian Marine Conservation Society director Darren Kindleysides says the increase in sediment is likely to have smothered seagrass, a food source for dugongs and turtles. If coral systems are damaged it could be decades
before the fragile, slow-growing systems improve. The Department of Environment and Resource Management is monitoring water quality and Kindleysides says longterm marine surveillance is needed before the full impact of the flood will be known. Brisbane’s real estate market will also be volatile in the short term. Real Estate Institute of Queensland managing director Dan Molloy says while it is still too early to know how big an impact the flood will have, the market was flat for months prior to the flood and prices could drop if there is a surge of properties on the market. The rental market will Small businesses in Moorooka be tighter hard hit by the flood as more people look for temporary housing and insurance companies secure accommodation for policy holders, which could see rents rise in high demand areas such as St Lucia. Insurance premiums are also likely to climb, even for properties that remained high and dry. Ingrid Just from consumer group Choice says increases won’t be known until the total cost of rebuilding is determined. Although insurance companies are themselves insured by multinational organisations, the huge payouts predicted mean insurers will face higher costs that may be passed on to consumers. Just says 80 per cent of Australians are under-insured and many flood victims will miss out on compensation. “It may take a situation like this horrendous, tragic event for people to relook at the fine print and
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even do some recalculations in terms of what sort of cover they need,” she says. Choice wants a clear definition of “flood” in the industry, with policies differentiating between flash flooding, floods caused by rivers or inland flooding and floods as a result of sea level rises or storm surges. Paul Giles from the Insurance Council of Australia says all claims will be looked at compassionately. “We have a very well financially resourced industry in Australia and our insurers have the capacity to pay out these claims,” he says. Financial assistance is already available, with banks announcing measures such as deferral of home loan repayments for up to three months, fees waived for restructured business loans and an emergency credit card limit. Small business and primary producers can apply for Natural Disaster Relief and Recovery Arrangements, with up to $25,000 available for clean-up and recovery, concessional interest rate loans of up to $250,000 and freight subsidies of up to $5,000. The Chamber of Commerce and Industry Queensland has also launched a call centre and online service to help businesses recover. But small businesses face a long road ahead. CCIQ’s Darren Goodwin says the flood came on top of increasing State Government regulatory costs, including a 13 per cent hike last year, and rising utility bills. “Small businesses cannot afford the huge regulatory burden and escalating local taxes,” he says. He wants the Bligh Government to deliver a clear strategy to rebuild infrastructure. “What we need is clever spend, not micro grants all over the place,” he says. “If people dig deep and support the business community then the flood of yesterday doesn’t need to mean the job losses of tomorrow.” For more information or help call the Disaster Recovery Hotline on 1800 173 349 or see www.qld.gov.au/floods. For insurance information call the Insurance Council hotline on 1300 728 228. Contact the CCIQ on 1300 548 044 or see www.cciq.com.au.
Image: AAP/Tony Phillips
I
t only took a matter of hours for Stephen Rumley’s entire livelihood to wash away. A co-owner and full-time worker at Francey’s Patisserie in the heart of Rosalie, the water rose so quickly in the early hours of Wednesday 12 January that he and his partner Lim Kheany didn’t have time to rescue their stock, much less their cabinets, baking equipment and electrical items. Nearly two weeks later, the floors have been scrubbed and the cabinetry ripped out, but the owners face a damage bill of at least $150,000 – and that’s not including lost income. Like many people affected by the floods, the store wasn’t insured and Stephen just looks bewildered when asked how he can come back from this event. “We lost everything,” he says. “No one was really prepared or expecting what was going to happen.” As Brisbane moves into recovery mode, the full cost to small business and the wider Brisbane economy is slowly emerging. Complete strangers have pitched in to help across the city but the road to recovery will take months, if not years. Next door to Francey’s Patisserie is Fish Lover’s, owned by Alana Ryan. She doesn’t expect to reopen until at least mid-February, after more than a metre of water filled her shop. Across the road, the Aoude family have owned Rosalie Foodmart for 16 years and are determined to rebuild. At press time, they still hadn’t found out whether their insurance includes flood cover and expect the repair bill to reach over $200,000. The Chamber of Commerce and Industry Queensland (CCIQ) estimates the Brisbane economy lost $230million every day during the peak of the flood. CCIQ president David Goodwin says future job losses are a real possibility unless affected industries receive more support. Goodwin says it’s too early to put a figure on the total cost to the state economy but it could total $5billion dollars or more. The worst affected industries will be farming, transport and manufacturing, particularly in the low-lying Brisbane to
How we’ll keep paying for the flood crisis The economic impact from the Brisbane flood will be felt for months, if not years, with job losses, increased insurance premiums and rising prices on the horizon. Margaret de Silva reports
call... 3899 7333 www. 06
.co
25 january 2011
Ipswich corridor, while tourism is expected to suffer after terrifying flood images were beamed across the world. These industries were already struggling – farmers experienced years of drought, tourism struggled during the global financial crisis and manufacturing suffered from the high Australian dollar. The impact on mining towns and agricultural areas such as the Lockyer Valley will be felt in Brisbane, with local engineering and construction firms unable to complete scheduled work and the price of fruit and veggies to rise. The Food and Grocery Council of Australia warns crop damage has limited the supply of berries, watermelon and pineapples, while AUSVEG says flooding has caused the price of sweet potato, ginger and pumpkin to double since November, with additional hikes likely for tomatoes, capsicum and zucchini. Geoff Trotter from fuel monitoring group Fueltrac says ethanol blended petrol will all but disappear from most Brisbane servos, as ethanol crops were wiped out. BP says ethanol blends will be replaced with unleaded for up to five months and Trotter says many fuel stations will only have pricier premium unleaded as an alternative. It could take decades for Moreton Bay to fully recover. Australian Marine Conservation Society director Darren Kindleysides says the increase in sediment is likely to have smothered seagrass, a food source for dugongs and turtles. If coral systems are damaged it could be decades
before the fragile, slow-growing systems improve. The Department of Environment and Resource Management is monitoring water quality and Kindleysides says longterm marine surveillance is needed before the full impact of the flood will be known. Brisbane’s real estate market will also be volatile in the short term. Real Estate Institute of Queensland managing director Dan Molloy says while it is still too early to know how big an impact the flood will have, the market was flat for months prior to the flood and prices could drop if there is a surge of properties on the market. The rental market will Small businesses in Moorooka be tighter hard hit by the flood as more people look for temporary housing and insurance companies secure accommodation for policy holders, which could see rents rise in high demand areas such as St Lucia. Insurance premiums are also likely to climb, even for properties that remained high and dry. Ingrid Just from consumer group Choice says increases won’t be known until the total cost of rebuilding is determined. Although insurance companies are themselves insured by multinational organisations, the huge payouts predicted mean insurers will face higher costs that may be passed on to consumers. Just says 80 per cent of Australians are under-insured and many flood victims will miss out on compensation. “It may take a situation like this horrendous, tragic event for people to relook at the fine print and
+ designer & builder - a collaborative journey
+ architectural homes - tailored to suit your lifestyle
+ unprecedented quality - 81% of our clients are referrals
+ small lot designs - one of our specialties
even do some recalculations in terms of what sort of cover they need,” she says. Choice wants a clear definition of “flood” in the industry, with policies differentiating between flash flooding, floods caused by rivers or inland flooding and floods as a result of sea level rises or storm surges. Paul Giles from the Insurance Council of Australia says all claims will be looked at compassionately. “We have a very well financially resourced industry in Australia and our insurers have the capacity to pay out these claims,” he says. Financial assistance is already available, with banks announcing measures such as deferral of home loan repayments for up to three months, fees waived for restructured business loans and an emergency credit card limit. Small business and primary producers can apply for Natural Disaster Relief and Recovery Arrangements, with up to $25,000 available for clean-up and recovery, concessional interest rate loans of up to $250,000 and freight subsidies of up to $5,000. The Chamber of Commerce and Industry Queensland has also launched a call centre and online service to help businesses recover. But small businesses face a long road ahead. CCIQ’s Darren Goodwin says the flood came on top of increasing State Government regulatory costs, including a 13 per cent hike last year, and rising utility bills. “Small businesses cannot afford the huge regulatory burden and escalating local taxes,” he says. He wants the Bligh Government to deliver a clear strategy to rebuild infrastructure. “What we need is clever spend, not micro grants all over the place,” he says. “If people dig deep and support the business community then the flood of yesterday doesn’t need to mean the job losses of tomorrow.” For more information or help call the Disaster Recovery Hotline on 1800 173 349 or see www.qld.gov.au/floods. For insurance information call the Insurance Council hotline on 1300 728 228. Contact the CCIQ on 1300 548 044 or see www.cciq.com.au.
Image: AAP/Tony Phillips
I
t only took a matter of hours for Stephen Rumley’s entire livelihood to wash away. A co-owner and full-time worker at Francey’s Patisserie in the heart of Rosalie, the water rose so quickly in the early hours of Wednesday 12 January that he and his partner Lim Kheany didn’t have time to rescue their stock, much less their cabinets, baking equipment and electrical items. Nearly two weeks later, the floors have been scrubbed and the cabinetry ripped out, but the owners face a damage bill of at least $150,000 – and that’s not including lost income. Like many people affected by the floods, the store wasn’t insured and Stephen just looks bewildered when asked how he can come back from this event. “We lost everything,” he says. “No one was really prepared or expecting what was going to happen.” As Brisbane moves into recovery mode, the full cost to small business and the wider Brisbane economy is slowly emerging. Complete strangers have pitched in to help across the city but the road to recovery will take months, if not years. Next door to Francey’s Patisserie is Fish Lover’s, owned by Alana Ryan. She doesn’t expect to reopen until at least mid-February, after more than a metre of water filled her shop. Across the road, the Aoude family have owned Rosalie Foodmart for 16 years and are determined to rebuild. At press time, they still hadn’t found out whether their insurance includes flood cover and expect the repair bill to reach over $200,000. The Chamber of Commerce and Industry Queensland (CCIQ) estimates the Brisbane economy lost $230million every day during the peak of the flood. CCIQ president David Goodwin says future job losses are a real possibility unless affected industries receive more support. Goodwin says it’s too early to put a figure on the total cost to the state economy but it could total $5billion dollars or more. The worst affected industries will be farming, transport and manufacturing, particularly in the low-lying Brisbane to
